Near the Peak

We are woefully close to the 2007 highs, which will draw out the very worst investors to shout “double top”–declaring that “we will now retest the 2009 lows.” These people have no idea, whatsoever, of how to invest. The walk around blind, leading others off cliffs.

We might reverse off this optimism. I already sense weakness in several leadership sectors, namely housing. The sequestration is supposed to be especially harmful to the housing market. Nevertheless, we are in a long term uptrend. These trivial declines should be viewed as “stupid nonsense,” something to acknowledge and to buy.

I added to my APO position and started new ones in PAMT (hoping for joozy news) and MTU. If we reverse and dive lower, I will take a nap, wake up, then nosh on a few sandwiches and/or bags of organically fresh tomatoes.

Finally, as we climb this peak and attempt to reach the summit, do not look down–for that will cause you to undergo a bout of vertigo, leading you to slip, fall, break your neck and spine– then die.

I bought PAMT.

Disclosure: This is a very thinly traded stock and my position, as a percentage of assets is very small. I am in this for a dice roll, speculative trade.

Bernanke is going to punch your lights out. If your bet is against the Fed, you are a terrible gambler.

“The Devil” seems to think PAMT will explode higher, based upon rumors and other things that can equate to a “gigantic short squeeze.”

I am bored with VHC. It’s been dead money for almost a month. In the near term, I like my chances with BX, APO and USG.

I don’t invest in biotechs because of AFFY. Once again, this catastrophe proves my point that the sector is nothing more than a roll at the old wheel of fortune, pinless hand grenades being tossed about in the old pool. Avoid the sector unless you have an in at the FDA.

CWEI is of great interest to me. However, the volume is so thin. It will be very hard for me to get in, let alone get out. Generally speaking, I like to own stocks that trade 500k shares per day.

Last but not least: DDD

I once owned the name and missed out on a huge run. Now the stock is getting drilled due to nefarious newsletters. I hate battleground stocks–but this seems overdone. Speaking of overdone, I am very close to initiating a long position in Apple July 600 calls.

CWEI

I’m doing some work on some distressed companies whose share prices have dropped more than 50% over the past year. Up until 3 months ago, the list was littered with solar stocks.Since they’ve run up, the list is left with nefarious education companies, as well as debt laden oil and gas producers.

One company that caught my attention is CWEI.

They are about 2/3rds oil, 1/3 natty, heavily hedged at about 80% of production. The interesting aspects about the company is the amount of property they own in oil rich territories like the Delaware Basin and Eagle Ford shale. In Eagle Ford alone, they have 100,000 acres. The reason why the stock is down is due to debt, saddled with about $350,000,000 in debt. However, the company is managing its affairs and has another $100 million left to spend recklessly.

The acreage alone, which are in the two richest fields in America, are worth $720,000,000. That’s not production from their current wells. Clearly, the stock is very undervalued. Their problem is financing. They have too much debt to work the fields themselves. They have $7 billion worth of drilling, which means they need to execute joint ventures or sell some properties in order to finance the rest.

At the current rate, it will take them 30 years to develop their properties. Clearly, this company would be better off under the management of a much bigger company. Merger anyone?

There’s a reason why the stock is down 57% yoy and it has nothing to do with the company being managed properly. Its CEO is 81 years old and I sense that any change at the top might light a fire to the shares.

Oil oil everywhere and no money to finance drilling.

Old Buzzard, Clayton Williams Jr.–majority shareholder of CWEI

They intend to divest from certain investments, using the proceeds to pay down the debt, awfully reminiscent to both WNR and FTK stories. The only question is: will the company find a way to get the earnings machine going again, helping shareholders get back to a $100 share price?

Certainly it would help if oil and gas prices rose dramatically.

I’ll be doing more work on this throughout the week. Any feedback is welcomed.

Here is last qt. earnings call.

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News

Documentary: Park Avenue – Money, Power, and the American Dream 

The Gods of the 21st Century 

Pentagon Informs Congress of 800k Civilian Furloughs if Sequestration Takes Effect on March 1st 

Rumors Circulate on Arrest Warrant for the Pope Regarding Allegations of Child Sex Crimes 

Need a Hedge for Those Equities & Commodity Plays? Try Greenbacks for a Change 

Today was good, erasing all of yesterday’s losses. Now I have to work on reversing the tragedy of Wednesday. I put some money to work in APO at the end of the day. I really like the asset managers as a low risk play on equities. They have many ways to beat estimates, one of which is through the issuance of stock–whether that be an ipo or secondary. Either way, I am a buyer of BX and APO. I should’ve bought WETF back yesterday; but I missed it like a nerd.

My shorts, AG, CCL, declined too–making today a near perfect session. If it wasn’t for the homosexuality of BZH, I’d be slapping people in the face with hot slices of roasted beef today.

I’m gonna calm down now. My nerves are always on edge. I’m a big, giant, ball of energy–moving from one project to the next.  I have a lot of responsibilities and grow weary of the mundane, so I need to keep it moving, else I might explode and commit triple homicides.

On an unbelievable side note, my good friend, “The Devil”, saw Ben “the beard” Bernanke at an airport recently and had a chance to introduce himself and have a small chat. The Devil asked Ben about gold and he retorted “there is no inflation and there will be no inflation.” Now the story will start to sound slightly unbelievable. He said Bernanke furthered by saying “I’m going to keep my foot on the pedal.”

Wow.

I started a new position in APO.

Disclaimer: If you buy APO because of this post, the next time you receive a blow job in a car, a homeless man will surprise you by opening the door and beating you senseless with his 40 ounce of malted liquor. And, you may lose money

This is one of my favorite moments in iBC history. It should be remembered, shared, and cherished by all.

Here are some classic moments from that momentous thread.

Full Post

Let me be clear about my bearish position on gold/silver miners. I’ve owned EXK and AG plenty of times over the years and have made money owning them almost every single time. But something is wrong with the industry. Dare I say these companies might be in the 2nd inning of a generational top?

Last week Goldman Sachs predicted a top in gold, saying the price wouldn’t hit $1,900 for another 20 years. All that aside, the raw commodities have done exceptionally well over the years, haven’t they? But why haven’t the miners done well?

Clearly with gold/silver at or near highs, the miners should be basking in coin, lavishing hefty dividends to their loyal subjects aka shareholders.

Unfortunately, the exact opposite is true. PAAS pays a 1% divvy, for crying out loud.

Look at the fundamentals of some gold/silver stocks listed below.

Now have a look at the much lampooned social media sector.

You will find both sectors to have many companies with rich price/sales ratios, as well as PEs. But what you won’t find in gold or silver is revenue and earnings growth. I’d rather take my chances in a richly valued growth stock, than a richly valued dog. Plus, with the amount of debt that is accumulating around the world, it’s only a matter of time before government’s start nationalizing these mines, leaving shareholders of mining companies left holding the Carnival Cruise feces bag (extra Triumph).

In the event that the raw commodities accelerate to the downside, there will be a shareholder Exodus–further damaging the morale and position of loyal, hardened, investors.

If you must own gold, just buy GLD.

Look for a earnings miss next quarter.

http://www.youtube.com/watch?v=uQL2m5o3tDg
http://www.youtube.com/watch?v=rV7t7joUXNc